SINGAPORE — Some countries might plan and debate their budgets based on “fiscal fantasies”, but the Singapore Government ensures its commitments are properly funded and focuses on fiscal prudence and responsibility, Deputy Prime Minister Lawrence Wong said.

Mr Wong, who is also Finance Minister, made this point in his speech rounding up the Budget debate in Parliament on Wednesday (Feb 28), as he called on all members of the House to commit to upholding fiscal responsibility and discipline.

“And if the opposition parties have a different view on this, I invite them to take up the challenge that the prime minister issued in this House a few weeks ago: Make drawing more from the reserves an election issue," Mr Wong added.

“Let's go to the people... Ultimately, Singaporeans can decide what is the best fiscal approach to take Singapore forward.”

After his speech, Members of Parliament (MPs) from the opposition parties, including Workers' Party (WP) chief Pritam Singh, rejected Mr Wong’s statement that they wanted to dip into the national reserves, and did not respond to his challenge to take the issue to the ballot box.

Mr Sitoh Yih Pin, MP for Potong Pasir constituency from the ruling People's Action Party (PAP), also waded into the debate to challenge Mr Singh on WP's stance regarding the use of the reserves. 

The following is an extract of their exchange, edited for brevity and clarity.

Mr Singh: (On the) subject matter that the deputy prime minister covered, about usage of reserves and so forth... I think it didn't come up in this debate but in previous debates, where we talked about how we can make up for funding gaps vis-a-vis GST (Goods and Services Tax) and all that.

Mr Wong: I thank him for his clarification, but perhaps he could also clarify, because the Workers’ Party had previously objected to GST and eventually accepted the GST at 7 per cent.

But (during the debate) about the two-percentage-point increase in GST, the options and alternatives that the Workers' Party advocated were: Use the reserves, increase the net investment returns (from the reserves), do this instead of (raising) GST. 

Now that we have implemented (9 per cent) GST — the Workers' Party said that with the 7 per cent, ‘Now that it's done, we've accepted it’ — perhaps Mr Singh might clarify, perhaps the Workers' Party would accept the 9 per cent as a reality? 

And would you then also say that the proposals to use more of the reserves... are therefore no longer relevant, and that the Workers’ Party is fully consistent with the PAP when it comes to our framework and rules for the use of the reserves?

Mr Singh: I would say that when we make proposals, it is in the context of what is before us at that point in time... Now, by and large, I think the vision or whatever is before the Workers’ Party in particular, I can't speak for the entire Opposition, but we will have to work with the information that we have. We are not in government. And if it means that we have to look at all options, we will look at all options. 

Mr Wong: The basic point I was getting at is whether or not there was a difference, and there is a difference in our fundamental fiscal philosophy. 

And I think that's important, because there was a time when there was alignment in this House between the PAP and the Workers’ Party. There was a time under Mr Low Thia Kiang (former WP secretary-general) when it was very clear — the ethos of fiscal responsibility was the same across both sides of the House. It seemed to me that this had changed under Mr Pritam Singh.

And the Workers' Party, of course, is free to change its position. But I think it should be clear if this is so. 

As far as the PAP is concerned, our position is quite clear. Doesn't mean that policies cannot change. Of course, we review, circumstances change, we update our policies.

But when it comes to certain fundamental principles and values like fiscal responsibility, a basic orientation not just to look at today, but for the future, this must never be compromised. This must never change. 

These principles were put in place by our founding leaders. They have continued under successive leaders of the PAP and they will certainly continue under my watch.

Mr Singh: I think I've heard this before in this House. 

The point again, I would make in response to that, is indeed, I do agree with the finance minister, policies change. 

The PAP Government yesterday would return the money that it had used from the reserves as a matter of principle, but today the PAP Government may not return the money it uses from the reserves. That's my response.

Mr Sitoh: (Mr Singh) mentioned that the current PAP Government does not return reserves to its people whereas the past one did so. I don’t understand him, because aren't returns from NIRC (Net Investment Returns Contribution) a way of returning money to the people? Unless he's talking about a drawdown on the reserves. 

Mr Singh: Mr Sitoh Yi Pin, the response that I gave to the deputy prime minister is a point of fact, it was in response to what he said about Mr Low having a certain position on the reserves, and that it has changed under me. I think this must be the third time he's mentioned it in this House and I've responded to it before and I responded to it the last time as well. 

Global financial crisis — Government draws down, returns the money. And I think there were some statements made about why it was doing that.

This time round, reserves are used for another emergency, and they're not returned. Just a simple statement of fact. Positions change.

Mr Sitoh: So is the Leader of the Opposition suggesting that the Government has to top up the reserves (drawn) during Covid? Because that would be a massive amount. How are we going to fund it then? 

Mr Singh: Mr Sitoh Yih Pin, you've just made the case that I was making: In one situation you can, another situation you can't. You have to look at the statements made when the money was returned, and then you see in a different situation, a different context, there's a different explanation.

Mr Sitoh: Can the Workers’ Party teach me — assuming (hypothetically) you're in government now — how do you top up S$40 billion? 

Mr Singh: I don't mean to belabour this because we're going to get into hypotheticals here. But the Government announced a 24-month instalment for property tax in this Budget. You can pay by instalments, can't you? Perhaps that could be a way.

Mr Sitoh:  I think surely, if we can get a S$40 billion surplus over the next X number of years, sure, it's a happy problem, but teach me how you're going to do that. 

Mr Singh: Mr Speaker, I think I don't need to prolong this. Member hasn't answered the point on instalments.